Revealed: Billboard's 2018 Top Business Managers

Illustration by Max-o-matic

Whether they work in New York, Los Angeles, Nashville or elsewhere, business managers were laser-focused on Washington, D.C., last December. After months of legislative wrangling, President Donald Trump signed into law the nation’s first major tax overhaul in three decades, affecting the 2018 income received by all U.S. taxpayers, musicians most certainly included.

So the business managers who track -- and maximize -- artist revenue from recording, publishing, touring and other sources, and who manage money flowing out through spending, investments or philanthropy, face a new challenge this year: absorbing the impact of the 400-page-plus tax-reform law for their clients.

“This tax law takes away deductions,” says Michael Karlin, a founding partner in Los Angeles business management firm NKSFB, citing just one provision of the complex legislation. Performers whose income flows through their own businesses -- or who receive investment earnings -- will fare best. “But if you’re treated as an employee and you receive wages, then all of your employee business deductions are eliminated -- all of them,” he says.

Likewise, new limits on deductions for state and local taxes and mortgage interest payments will disproportionately affect residents of New York and California, the home states of a large proportion of musical artists.

“I caution [clients] that, although it looks like tax rates may have been cut, it doesn't automatically mean that they’ll be paying less tax in the end, given the limits on state tax deductions,” says Julie Boos, chairman/co-owner of Nashville-based firm Flood Bumstead McCready & McCarthy.

Tax planning aside, business managers face the perennial challenge of guiding their clients’ spending and investments. That’s true even if the money-making schemes of their creative clients include, for example, a company that clones pets, a cactus farm in Mexico or the development of a state-of-the-art beer helmet. A number of artists are also putting money into the growing marijuana industry.

Business managers often decline to identify the performers who obtain their advice. (In a high-profile exception, prior to settling a legal dispute with actor and Hollywood Vampires guitarist-keyboardist Johnny Depp, his former business managers detailed in court papers his $2 million-a-month lifestyle, including expenses for his island in the Bahamas, his taste for fine wine and a 156-foot yacht.)

Not surprisingly, managers watch their own money as well as their clients’ funds. Their favorite bargains? “Shopping at Costco and buying strawberries on the roadside,” says Bernard Gudvi, longtime adviser to the late Tom Petty (and now his estate). “Fresh veggies from the garden,” says Nashville business manager Lillian Williams. Adds Tri Sports and Entertainment Group CEO Lou Taylor: “Any designer shoe on sale.”

Louis Barajas, 56
Business Manager, Business Management LAB

As Latin music revenue has soared over the past year, so has Barajas’ business in Los Angeles and Miami. He has doubled his staff (from six to 12) to serve a clientele that includes Nicky Jam, Yandel and the estate of Jenni Rivera. He helped Mexican pop star Ana Bárbara recover $416,000 after the singer filed suit against Wells Fargo in 2016 for opening false accounts in her name. Barajas also stopped another act from investing in a scam that would have cost the artist over $500,000. “After doing a background search on the potential investor, we found out that he had a longer rap sheet than my client’s list of Billboard hits,” says Barajas.

The Nashville-based business-management powerhouse had a changing of the guard in 2017 as Boos, Cheek, Clark and Romano assumed new titles and roles that put in place a succession plan set up by the company’s founders. The move seeks to guarantee the continuity of clients’ “financial management and security for decades to come,” according to the company.

Julie Boos, 48
Owner/Chairman, Flood Bumstead McCready & McCarthy
Jamie Cheek, 47
Owner/President, Flood Bumstead McCready & McCarthy
Duane Clark, 48
Owner/Vice chairman, Flood Bumstead McCready & McCarthy
Carmen Romano, 54
Owner/VP, Flood Bumstead McCready & McCarthy

FBMM closely guards the identities of its clients but the managers report a year packed with deals, including opportunities to maximize non-touring revenue for clients, sales of songwriting catalogs and “some long overdue audits with major record companies,” says Cheek. “Two of them were combined with some renegotiations with labels. I was very proud of what we were able to accomplish in settling out the audits and redoing [the artists’] deals.”

David Bolno, 42
Partner, NKSFB
Richard Feldstein*
Partner, NKSFB
Michael Karlin, 64
Founding partner, business management, NKSFB
Mickey Segal, 60
Managing partner, NKSFB

​​Karlin, who co-founded NKSFB in 1981 with Segal (and now-retired partner Fred Nigro) says the 2017 tax act is “generally going to hurt” 60 percent of his firm’s individual, high-net-worth clients who live in Southern California “because they’ll no longer get to deduct state and local income taxes.” But he cheers the reduction in the top tax rate on ordinary earned income for individuals from 39.6 percent to 37 percent. And Karlin is relieved that the favorable capital-gains treatment on the sale of music copyrights survived the tax reform sausage-making: “No one expected it to, but it did.” At a firm with 370 employees, says Segal, “we have about 42 people just in our tax department, which sets us apart from other business management firms.”

Nicholas Brown, 68
Partner, NKSFBGO
Bernard Gudvi, 71
Partner, NKSFBGO
Michael Oppenheim, 58
Partner, NKSFBGO

​Gudvi closed a deal in April for his 50-person GSO Business Management to join the larger NKSFB. The resulting subsidiary, NKSFBGO, serves as the parent firm’s office in California’s San Fernando Valley and is managed by Gudvi, Oppenheim and Brown. (Each is also a partner in NKSFB.) Last October, Gudvi suffered the personal loss of longtime client Tom Petty, but he continues to handle finances for the singer’s estate. “Tom was the best,” he says. “I respected him, liked him and miss him.” Brown’s specialty is dealing with non-U.S. artists on tour in the United States. He says that his firm recently reduced a client’s tax liability for $9.5 million in touring income -- which, at the full rate, would have been about $2.8 million -- to $300,000 through deductions. Says Oppenheim, whose clients include Beyoncé, Eminem, Steve Aoki and Julia Michaels: “We have more and more clients asking about potential business opportunities in the [legal] cannabis world. It’s an area every business adviser will need to familiarize themselves with.”

Legina Chaudoin, 46
Partner, O’Neil Hagaman
Al Hagaman, 65
Partner, O’Neil Hagaman
Cheryl Harris*
Partner, O’Neil Hagaman
Kerry O’neil, 65
Partner, O’Neil Hagaman
Lillian Williams, 54
Partner, O’Neil Hagaman

​​“Protect and educate” is how O’Neil describes his role in overseeing artist finances. During the past year, his 34-year-old Nashville firm named Chaudoin and Williams as new partners and brought new opportunities for “clients who have had major headline arena tours in domestic and foreign markets, television specials and new album releases, record-label negotiations, publishing acquisitions, sales and writer deals,” says Hagaman. The firm’s impact can be measured in investment returns and tax savings but also “ticket sales, media impressions, radio success, brand development and extensions -- and new business-venture startups,” adds Hagaman.

Vicky Cherry, 55
Principal, Vaden Group

A songwriter who had scored a chart-topping hit came to the Nashville offices of the Vaden Group within the past year with an admission. “He hadn't filed taxes in five years,” says Cherry, who declines to identify the writer (or the song). “He had a No. 1, and he wanted to get caught up. He owed thousands of dollars. I did an offer in compromise with the IRS, and he ended up paying 56 percent of what he owed. That gave him a chance to have a clean slate with the IRS and keep writing No. 1 songs.” Of the new federal tax legislation, Cherry acknowledges that “we’re all still trying to figure out where the big savings are going to be.”

W. Eric Fulton, 55
Founder/managing partner, Fulton ­Management

After advising his clients against becoming involved with Bitcoin, Encino, Calif.-based Fulton says that nearly two dozen invested in the cryptocurrency, and “all but one lost money. We try to make sure that clients don’t get caught up in the hype and stick to more conservative bonds and boring things that secure their future.” Fulton cites client Colbie Caillat as one who has done well with this strategy. “Colbie hasn't wanted to tour recently, so we’ve done a good job of investing her money and she’s fine.” He’s also tallying higher touring grosses for clients Hall & Oates who, under a new deal with Live Nation, are “reaching a whole new audience.”

Todd Gelfand, 60
Managing partner, Gelfand Rennert & Feldman
William Harper Jr., 61
Partner, Gelfand Rennert & Feldman
Stanley Lim, 48
Partner, Gelfand Rennert & Feldman
Melissa Morton, 44
Partner, Gelfand Rennert & Feldman
Ronald E. Nash, 59
Partner, Gelfand Rennert & Feldman
David Phillips, 50
Partner, Gelfand Rennert & Feldman

“We’re seeing a sea change in the [business management] industry because of the demands of technology and cybersecurity,” says Los Angeles-based Gelfand, discussing a milestone deal in the past year for his firm, which his father, Marshall M. Gelfand, launched in 1967. “We felt we needed to continue to grow in those areas, so we merged with Focus Financial Partners.” The deal allows GRF to maintain its own identity while becoming an operating entity of Focus, an international consortium of independent wealth-management firms. As GRF has grown to five offices worldwide, “my biggest accomplishment is to be able to maintain the culture, spirit and enthusiasm” of the firm, says Gelfand. He declines to speak about specific clients, but chances are he had no trouble scoring tickets to Springsteen on Broadway. (The firm is listed in the Playbill credits.)

Sean Granat, 37
Senior Partner, CohnReznick

Non-U.S. artists touring in the United States can have as much as 30 percent of their gross tour revenue withheld for federal income tax -- unless they have a business manager like Granat. His team at CohnReznick in New York secured central withholding agreements with the IRS “for more than two dozen touring acts over this past calendar year,” he says. For a top band grossing $100 million, that agreement meant that $30 million remained in their accounts until the tour concluded. “This tour ended up with a 60 percent profit margin, so federal tax liability of roughly $23 million was calculated and paid,” says Granat. A balance of $7 million was “paid to the artists immediately [instead of] being held by the IRS prior to being refunded.”

Michael Kaplan, 47
Partner, Miller Kaplan Arase

Kaplan advised one top client on a worldwide tour during the past year, negotiating the act’s contracts and dealing with global taxation strategy. Of the recent U.S. tax changes, he says, “We’re focusing not on how to get around the tax, but on where the growth potential for our clients is. We’re always trying to generate more growth and revenue, then looking at the tax pieces.” For Kaplan, who practices in North Hollywood, Calif., and majored in political science at the University of California in Berkeley, these times often call for wider conversations with clients. “It’s not just about the music,” he says. “It’s the message you’re putting out there, it’s what you stand for in terms of what you’re representing, your brand [and] who you are.”

David Levin, 60
CEO, DL Business Management

Working with his clients’ management teams, New York-based Levin helps oversee the expansion of the careers of husband and wife John Legend and Chrissy Teigen, as well as Jessica Simpson -- and their financial power -- through endorsements and branding, including Legend’s deal with LVE Wines, Teigen’s agreements with Becca Cosmetics and McDonald’s, and the couple’s pacts with Google and Pampers. Simpson’s lifestyle line, a partnership with Sequential Brands Group, moved into makeup brushes in July and will include color cosmetics later in 2018. Levin, whose roster of music clients also includes LIVE, Lake Street Dive and Wyclef Jean, has a personal favorite bargain: “Amazon Prime purchases!”

Matt Lichtenberg, 60
Partner, Level Four Business Management
For artists or executives living in high-tax states who face steeper federal-tax liability for 2018, Los Angeles-based Lichtenberg counsels: “Don’t charter that jet to Fiji just yet.” But with the loss of deductions for state income tax and property tax, they ought to be prepared “to pay more, not less, in taxes,” he says. In the past year, the business manager says he has been focused on “helping guide clients to financially navigate the changing economy,” adding: “It’s not easy telling clients they need to downsize or modify their lifestyles.”

Solomon Smallwood, 49
Managing Director, Provident Financial Management
Bill Vuylsteke*
Managing Director/Co-owner, Provident Financial Management

Smallwood scaled back his music roster this past year to focus on key clients Chris Brown and Justin Bieber while also merging his Atlanta-based TSG Financial ­Management, as of Jan. 1, with Provident Financial Management. Among his music industry concerns: streaming contracts that “eliminate our ability to accurately track how much the record companies are being paid from this content and if, in turn, the artists are being properly compensated.” Vuylsteke, a co-owner of Provident who works in the firm’s Los Angeles office, says the No. 1 mistake made by new artists is “not putting money away immediately for the long term.”

Lou Taylor, 52
CEO, Tri Star Sports and Entertainment Group

“Landing their first record deal is as defining an achievement for one client as grossing $50 million a year on tour is for another -- it’s all perspective,” says Taylor, whose Tri Star firm, based in Los Angeles and Nashville, marks its 26th anniversary in 2018. Clients include Britney Spears, Jennifer Lopez, Meghan Trainor, Mary J. Blige and Florida Georgia Line. For Spears, Taylor has tracked the earnings from the singer’s tours including her 2017 Asia swing and summer shows in Europe. And she helped FGL’s Tyler Hubbard and Brian Kelley complete a commercial development in Nashville’s hip Hillsboro Village to house their studio, publishing company “and retail space for Tribe Kelley, an apparel brand created by Brian and [his wife] Brittney."

David Weise, 50
Senior partner, David Weise & Associates

In light of the new federal tax law, which, says Weise, “targeted negatively the blue states and really targeted entertainers,” the Encino, Calif.-based business manager has delivered blunt advice to some of his clients: Get out of California. “I had three move out of the state; one to Washington, one to Texas and one to Tennessee,” says Weise, who counts Coldplay, Jack White and The Weeknd among his clients. Given that residents of the Golden State will no longer “get the state tax deduction you used to,” he says, “it’s just not economical if you’re an artist who does not have to be in California.”

Kris Wiatr, 46
President, Wiatr & Associates

When asked how he would measure his success as a business manager -- advising clients that include Chris Stapleton, Maren Morris, Mick Fleetwood and Jewel -- Wiatr says, “You might think the metric is numbers, but it’s more than that. What drives our team is a passion for our clients and our relationships with them. It’s not easy to report on paper,” continues the Nashville-based business veteran, “but it’s the one thing that will make or break anyone in this business.”

Victor Wlodinguer, 64
Partner/Practice Leader, Music Business ­Management, Citrin Cooperman

The new tax law created a 20 percent deduction for income earned by some self-employed individuals. “But it has been challenging to figure out whether some portion of our clients’ businesses are going to qualify,” says Wlodinguer, whose roster includes DJ Premier, The Strokes, Interpol, Thievery Corporation and Ben Folds. While awaiting rulings to clarify the new tax law, “we’re using our best judgment,” adds the New York-based business manager. Meanwhile, the central withholding agreement he set up for non-U.S. clients Snow Patrol and Gipsy Kings cut advance tax payments for those acts as they toured stateside. And for another client whose name he declines to disclose, Wlodinguer reports achieving a tax savings in the past year “in the neighborhood of $200,000 to $500,000.”

Tom Cyrana, 60
Partner/Managing Director, RZO​
John Gula, 60
Partner/Managing Director, RZO
​Lia Sweet, 57
Partner/Managing Director, RZO
Bill Zysblat, 67
Founding Partner, RZO

"We are probably the only artist-based business management firm," says Zysblat of New York-based RZO. "We represent no managers, agents, executives, labels, merchandisers or publishers."

The firm's artist roster is unrivaled. RZO watches out for the financial interests of ("in no particular order," says Zysblat), The Rolling Stones, U2, the estates of David Bowie and John Lennon, Lady Gaga, Shania Twain, Luis Miguel, Steely Dan, David Byrne, Joe Jackson, fun. "and probably another 15 to 20 artists."

Zysblat and his late partner, Joe Rascoff, formed RZO after the shared experience of working with The Stones beginning with the band's 1975 tour of North America. Today, RZO's partners, who are each responsible for a specific department at the firm, include Cyrana (royalty compliance), Gula (tax) and Sweet (business management). That said, "we all do a little bit of everything," adds Zysblat.

Zysblat assisted Bowie when, before his death in 2016, the artist agreed to provide items from his 75,000-piece archive to the curators of the exhibit "David Bowie is," which opened in London in 2013 and circled the globe before closing in Brooklyn in July. Estimated worldwide ticket sales exceeded $70 million. Bowie, and later his estate, did not have any financial interest in the exhibit, says Zysblat.

How do you measure success?
It's a simple metric: Did we do what was best for the client, and are they happy with the result? If you can achieve both, you have succeeded.

What advice have you given clients as a result of the new tax law?
There are a number of changes we are recommending, but most of them are changes in [business] structure, so we don't need the clients' active involvement in implementing them. None of our clients are employees of third-party companies, so the major change in unreimbursed business expenses does not have an impact on us.

How has the rise of streaming affected artist income?
Streaming is finally becoming a significant income source, but it has a long way to go. Tracking the accuracy of streaming income remains a challenge.

With U2 and The Stones on tour now and Lady Gaga playing arenas in 2017, what was the highlight of the past year?
Looking back, the "David Bowie is" worldwide exhibition was one of the most satisfying outcomes of something that was never anticipated to be a world-record-breaking event. It was David's wish, long before he passed away, to not participate in any of the ticket sales revenue with the participating museums. So, having helped to raise well in excess of $70 million for the arts is as gratifying as it gets. 

-- Thom Duffy

*Declined to reveal age

Contributors: Cathy Applefeld Olson, Steve Baltin, Dean Budnick, Leila Cobo, Chuck Dauphin, Thom Duffy, Melinda Newman, Paula Parisi, Deborah Wilker, Nick Williams

This article originally appeared in the Aug. 11 issue of Billboard.